Stocks To Watch: ACC, Asian Paints, Punjab National Bank, United Spirits

Asian stocks climbed Tuesday, after their U.S. counterparts closed higher and as rising yields boosted financials. Equity benchmarks in Tokyo, Seoul and Sydney opened higher, while futures on Hong Kong’s Hang Seng showed a modest gain.

The Singapore-traded SGX Nifty, an early indicator of NSE Nifty 50 Index’s performance in India, traded 0.1 percent lower at 11,088 as of 7:10 a.m.

Here Are The Stocks To Watch Out For In Today’s Trade

• Syngene International extended R&D Agreement with Baxter Healthcare till 2024.
• IZMO bagged multi-crore order from a leading OEM in Mexico for its car visualizer product.
• PNB received Rs 2,816 crore capital infusion from Indian government.
• Allahabad Bank received Rs 1,790 crore capital infusion from Indian government.
• Fitch revised UPL outlook from stable to negative.
• Essel Propack started first phase of commercial production of laminated tubes in Assam.
• Indian Energy Exchange to consider stock-split on Aug. 9.
• Vedanta: Ground water around the company’s copper plant contaminated (Bloomberg)

Earnings To Watch

• Asian Paints
• Century Plyboards
• Chambal Fertilisers
• Glaxosmithkline Pharmaceuticals
• Hexaware Technologies
• ICICI Prudential Life Insurance
• Info Edge India
• Inox Leisure
• Kajaria Ceramics
• KRBL
• Music Broadcast
• Network18 Media
• Radico Khaitan
• Power Grid Finance Corp.
• Symphony
• Teamlease Services
• TV18 Broadcast

Earnings Reactions To Watch

ACC (Q2, YoY)

• Revenue up 11.5 percent at Rs 3,848.3 crore.
• Net profit up 1.1 percent at Rs 325.5 crore.
• Ebitda down1.8 percent at Rs 623.9 crore.
• Margin at 16.2 percent versus 18.4 percent.

Hindustan Zinc (Q1, YoY)

• Net profit up 1.5 percent at Rs 1,918 crore.
• Revenue up 16 percent at Rs 5,310 crore.
• Ebitda up 13 percent at Rs 2,713 crore
• Margin at 51.1 percent versus 52.1 percent.

L&T Technology Services (Q1, QoQ)

• Revenue up 9.2 percent at Rs 1,152.2 crore.
• Net profit up 24.4 percent at Rs 197.5 crore.
• Ebit up 43.8 percent at Rs 169.7 crore.
• Margin at 14.7 percent versus 11.2 percent.

Alicon Castalloy (Q1, YoY)

• Revenue up 50.4 percent at Rs 296.7 crore.
• Net profit at Rs 12.3 crore versus Rs 6.1 crore.
• Ebitda up 56.2 percent at Rs 32.5 crore.
• Margin at 11 percent versus 10.5 percent.

Tejas Networks (Q1, QoQ)

• Revenue up 16.9 percent at Rs 235.8 crore.
• Net profit at Rs 45 crore versus Rs 20.4 crore.
• Ebitda up 38.9 percent at Rs 62.5 crore.
• Margin at 26.5 percent versus 22.3 percent.

V-Mart Retail (Q1, YoY)

• Revenue up 14.6 percent at Rs 361.2 crore.
• Net profit up 11.2 percent at Rs 24.9 crore.
• Ebitda up 16.4 percent at Rs 43.2 crore.
• Margin at 12 percent versus 11.7 percent.

Balaji Amines (Q1, YoY)

• Revenue up 30 percent at Rs 260.2 crore.
• Net profit up 48.2 percent at Rs 33.8 crore.
• Ebitda up 44.6 percent at Rs 58.7 crore.
• Margin at 22.6 percent versus 20.3 percent.

Indiabulls Ventures (Q1, YoY)

• Revenue up 118.9 percent at Rs 344.6 crore.
• Net profit up 94.9 percent at Rs 87.7 crore.
• Ebitda at Rs 212.7 crore.
• Margin at 61.7 percent versus 48 percent.

Linde (Q1, YoY)

• Revenue up 11.5 percent at Rs 549.6 crore.
• Net profit at Rs 5.2 crore versus net loss at Rs 2.2 crore.
• Ebitda up 7.7 percent at Rs 85.4 crore.
• Margin at 15.5 percent versus 16.1 percent.

L&T Infotech (Q1, QoQ)

• Revenue up 7.7 percent at Rs 2,155.7 crore.
• Net profit up 24.8 percent at Rs 361.3 crore.
• EBIT up 49 percent at Rs 381.4 crore.
• Margin at 17.7 percent versus 12.8 percent.

Delta Corp (Q1, YoY)

• Revenue up 45.6 percent at Rs 187.3 crore.
• Net profit up 85.7 percent at Rs 41.4 crore.
• Ebitda up 44.6 percent at Rs 65.5 crore.
• Margin at 35 percent versus 35.2 percent.

Granules India (Q1, YoY)

• Revenue up 20.1 percent at Rs 453.2 crore.
• Net profit up 40.8 percent at Rs 51.8 crore.
• Ebitda down 4.6 percent at Rs 72.5 crore.
• Margin at 16 percent versus 20.1 percent.

ICICI Securities (Q1, YoY)

• Revenue up 8.6 percent at Rs 435.9 crore.
• Net profit up 13 percent at Rs 133.8 crore.

United Spirits (Q1, YoY)

• Revenue up 13 percent at Rs 2,012 crore.
• Net profit up 29 percent at Rs 81.3 crore.
• Ebitda up 23 percent at Rs 193 crore.
• Margin at 9.6 percent versus 8.8 percent.

Rane Engine Valve (Q1, YoY)

• Revenue up 15.88 percent at Rs 102.5 crore.
• Net loss at Rs 4.4 crore versus net loss at Rs 2.7 crore.
• Ebitda at Rs 2.8 crore versus Rs 4.1 crore.
• Margin at 2.7 percent versus 4.6 percent.

Bulk Deals

• JBF Industries: IFCI sold 4.3 lakh shares or 0.52 percent equity at Rs 29.1 each.
• Rajratan Global Wire: Renaissance Advanced Consultancy sold 37,100 shares or 0.85 percent equity at Rs 745.14 each.

Who’s Meeting Whom

• VRL Logistics to meet Five Rivers Portfolio Management on July 24.
• MCX to meet Julius Baer Wealth Advisors on July 24.

Insider Trades

• IDFC Bank promoter IDFC Financial Holding Company acquired 48 lakh shares from July 17-19.
• Asian Granito India promoter sold 6,300 shares from July 17-20.

Trading Tweaks

• Indo Amines and Adani Green Energy circuit filter revised to 10 percent.
• Polaris Consulting last trading day before delisting.

F&O Cues

• Nifty July futures closed trading at 11,099.4 premium of 14.7 points.
• Across series: Nifty open interest up 2 percent; Bank Nifty open interest down 6 percent.
• Rollover: Nifty at 21 percent, Bank Nifty at 14 percent.
• India VIX ended at 13, down 4 percent.
• Max open interest for July series at 11,100 Call (open interest at 34.1 lakh, down 10 percent)
• Max open interest for July series shifts to 11,000 from 10,800 (open interest at 57.6 lakh, up 21 percent)

Active Stock Futures

Brokerage Radar

CLSA on L&T Tech

• Maintained ‘Buy’ with a price target of Rs 1,750.
• June quarter witnessed a stellar revenue growth but margin miss.
• Large deals ramping up, pipeline healthy and client mining strong.
• Secular growth and cyclical recovery story intact.

CLSA on ICICI Securities

• Maintained ‘Buy’; cut price target to Rs 480 from Rs 520.
• June quarter’s profits tad below estimates.
• Slower growth in broking revenues offset by healthy growth in distribution/corporate finance.
• Lower participation from retail clients was the key drag.
• Uptick in retail trading volumes will be key to profitability.

Brokerages On United Spirits

Emkay

• Maintained ‘Reduce’ with a price target of Rs 600.
• June quarter’s results reported disappointing numbers
• Overall volume grew by 1 percent compared to our expectations of above 14 percent.
• Gross margin improved by due to price hikes in key states and better product mix.

Macquarie

• Maintained ‘Underperform’ with a price target of Rs 443.
• June quarter’s adjusted net profit below estimates on account of higher Ad and other spends.
• Volume growth in-line with our estimates.
• Expect Ad spend to remain high on higher competitive intensity.
• Expect significant downgrades to consensus.

Morgan Stanley

• Maintained ‘Equal-weight’ with a price target of Rs 650.
• Weak volume growth and sharp increase in costs affected June quarter’s margins.
• See low visibility on earnings growth, especially after weak June quarter.
• Stock to trade lower on continuing overhang of GST uncertainty.

Brokerages On ACC

Macquarie

• Maintained ‘Neutral’ with a price target of Rs 1,640.
• Strong quarter, but remain cautious.
• ACC should start underperforming on volume growth in absence of capacity additions.
• Valuations have corrected, but triggers for a re-rating are lacking.
• Expect costs to ease in coming quarters.

CLSA

• Maintained ‘Buy’; cut price target to Rs 1,900 from Rs 2,150.
• June quarter was strong with Ebitda and net profit ahead of estimates.
• Surprisingly strong realisations and modest cost inflation.
• Cut earnings estimates by 10-12 percent as lower realisations expected in second half of 2018 and 2019.

JPMorgan

• Maintained ‘Neutral’; cut price target to Rs 1,500 from Rs 1,680.
• Adjusted Ebitda a big beat driven by realisation and cost controls.
• Delivered meaningful improvement in operating trends over the last six quarters.
• ACC’s valuation is cheap, and earnings surprise could drive a sharp rally.
• Clarity on new capacity expansion/M&A will be key.

Morgan Stanley

• Maintained ‘Overweight’ with a price target of Rs 1,887.
• Earnings surprise led by better realisation owing to geography and mix channel.
• Expect margin expansion to drive earnings as utilisation and volume growth at peak.
• Expect freight cost to remain stable at these levels in ensuing quarters.

Brokerages On Hindustan Zinc

Macquarie

• Downgraded to ‘Neutral’ from ‘Outperform’; cut price target to Rs 276 from Rs 316.
• Adjusted June quarter’s Ebitda was in-line on the back of strong prices.
• With upcoming mine supply, zinc prices to remain under pressure.
• Expect inconsistent dividend payout, price headwinds and back-ended volume growth.
• Premium valuation difficult to justify.

Credit Suisse

• Maintained ‘Neutral’; cut price target to Rs 295 from Rs 325.
• June quarter’s Ebitda missed on the back of lower volumes and long-term wage settlement.
• Below EBITDA, lower-than expected other income led to net profit miss.
• Cut FY19 volumes and increase costs to incorporate higher coal costs and wages.